More Registers of Deeds Must Investigate Mortgage Documents

My article in The American Prospect about the heroic registers of deeds working to present evidence that banks committed massive fraud in their documentation and processing of mortgages and foreclosures. Here’s an excerpt:

But Jeff Thigpen, the register of deeds in Guilford County, North Carolina, a county of about 465,000 in the center of the state (the largest city is Greensboro), decided to survey all the mortgage documents submitted to his office by DocX, a notorious “mortgage mill” that processes documents on behalf of lenders, between August 2006 and April 2010. He was inspired by a 60 Minutes investigation revealing numerous forgeries, backdating, and other false information on mortgage documents. “When I saw that [story], I was basically on fire,” Thigpen says. “‘I know this material is in my office, I’ve got to find it, I’ve got to get it out.'”

Out of the 6,100 documents Thigpen examined, 4,500 showed signature irregularities. The name of one DocX employee, Linda Green, who was acting as a vice president for several major banks, was forged 15 different ways on the Guilford County documents, rendering them invalid. Thigpen’s investigation was one of the first systematic assessments of mortgage document fraud in the entire country, certainly more robust than anything conducted by state and federal regulators.

Here’s some more on Thigpen. He’s a really interesting guy. When he was 4, his dad got his leg caught in a combine while farming corn. A year later his mom went blind for 18 months. They were helped by their community with rising medical bills, and it imbued in him a spirit of service and wanting to give back. Before entering politics, he worked with a local faith group on a nationwide boycott and civil disobedience action against K-Mart. He has fought big business and big money, and won.

In a way, these local officials are much closer to the situation on the ground in their communities. They know the pain and heartbreak of foreclosures. They want to help their friends and neighbors. And Thigpen is perfectly situated to do so.

Sitting in his county register’s office was all the evidence needed to make a case that banks and their mortgage servicers have systematically broken the land title recording system, committed massive document fraud and foreclosed on borrowers with insufficient evidence of ownership. The banks tried to take away the land recording system from the public through the use of MERS, and save billions of dollars in recording costs. But MERS masked the shoddy documentation and illegal securitizations at the heart of the fraud. The registers have the ability to blow that scam wide open. They can also sue for back recording fees, and given the budget situation of cash-strapped counties and states, that gives them a major financial incentive.

“People want to know who owns what, they want to know that people are who they say they are. And people want a sense of transparency and fair dealing,” Thigpen told me. “People fundamentally question whether they have that anymore.” And they’re right to question it. Because if the documents at the register of deeds office are inadequate, it clouds the title on their properties. It makes the property hard to sell. It makes other properties hard to purchase. It throws a system of land recording with us since the pre-colonial period into chaos.

The biggest aid to Thigpen and the few other registers of deeds who have awareness of this issue would be to move other registers to their cause. Every county in America has a register of deeds who could perform the exact same investigation that Thigpen did. Simply displaying the evidence will have a major effect.

So everyone reading this. You live in a county. Look up your local register of deeds. Tell them that you’re a constituent, and that you’d like them to investigate their documents for irregularities. In all likelihood, these people have never received a constituent call in their lives. It won’t take a lot to spur them to action on this.

We don’t need discovery. We don’t need the banks to voluntarily give up information. We only need to look at the documents at the disposal of the registers of deeds. That can only help survey the extent of the damage caused by the banks, so we can arrive at an equitable solution.